Preparing for the mobile data revolution

Every parameter is pointing toward mobile phones replacing bank branches, ATM cards and much more. But are telecom companies ready to take the consumer onslaught and ensure safe transactions?

The global telecommunications (telecom) industry has witnessed several changes. The noteworthy ones include infrastructure upgradation and access to new age networks (such as 4G, Long-Term Evolution (LTE)) which are gaining prominence, moving the core product in telecom from voice calls to data. Secondly, with the availability of affordable smart phones, mobile penetration as well as number of users accessing data services has increased considerably. These trends collectively have given rise to the third trend, where mobile phones have become more than just communication devices. They are assuming a larger role in the life of users by becoming the primary screen and a single point of access for entertainment, banking, social networking and many others aspects.

Consumer research reports released have predicted that the number of mobile phone users in India is expected to rise to 730.7 million this year. Additionally, as per Statista Inc., one of the leading statistics companies on the internet, the number of smartphone users in India is predicted to reach 340 million in 2017, that could rise to 480 million by 2021.This has made India the second largest smartphone mobile market in the world, ahead of the US. However, while the internet penetration rates in 2016 has reached to 27% from 22% in 2015, there is still a lot of room for future growth.

The Indian market has been at the forefront in embracing changes such as data revolution, mCommerce etc. New entrants in the 4G space are revolutionizing the voice and data markets. Other telecom operators too, have responded aggressively to the increasing competition.

In a significant move by the Government, the role of telecom is expected to become pivotal in transforming and driving consumer behaviour. The demonetization drive saw mobile money and E- wallets turning crucial to move to a cashless economy. E-wallets and related companies in the digital payment space quickly grasped the opportunity to become adequate substitutes for physical currency, and one of the biggest gainers. According to media reports, certain mobile wallet companies saw as much as a fivefold increase in overall traffic post the demonetization announcement. They claimed that the number of app downloads tripled and there was a 250% surge in overall transactions and transaction value. Others expressed to witnessing a 40% increase in app downloads, within less than 18 hours.

However, the telecom industry also needs to gear up to the challenges in maintaining data privacy, transparency in commercial transactions and compliance with local laws that would come due to surge in usage of data and increased volume of commercial transactions being done using mobile money. The Know Your Customer (KYC) norms in the sector still have scope for improvement, and possibly match those of other regulated sectors. Risks related to fraud and other forms of unethical conduct need to be taken into consideration for future growth and sustainability of the sector.